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First set of UIDs to be issued by 2011

05 April 2010

Shereen Bhan / CNBC-TV18

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As one of the biggest projects happening in the world, the UID project of the Government of India is generating a lot of excitement, says Nandan Nilekani.

The Indian government is moving forward with plans to provide citizens with a Unique Identification (UID) number.

The project involves biometric authentication behind the system, which will mean creating the world’s largest biometric database covering around one billion people.

The project will be one of the most ambitious marketing exercises undertaken in India.

First set of UIDs to be issued by 2011
Image Credits: Rajkumar / Mint / UIDAI Chairman Nandan Nilekani says though he cannot put a number around the savings the UID project would lead to, it will be substantial

The ambitious project is now gathering pace. Nandan Nilekani, chairman of the Unique Identification Authority of India (UIDAI), is confident that the first unique IDs will be issued by February next year (2011).

Edited excerpts of an interview by Shereen Bhan from CNBC-TV18.

What is the progress being made at the UIDAI?

We’ve selected Ernst and Young as our consultant and they are on board. We have signed a contract with them and they have started working with us on the RFP (request for proposal) for the managed service provider, who is going to manage our database for us.

We put out a tender for an application software developer. We gave the specifications of our software and that is in the process...We are working in three states on checking out the details and actually how it’s going to work. Details like how enrollment will happen, how we will capture finger prints...So all that is being done.

What would it actually lead to in terms of savings for the government? Because I was reading somewhere that you know on account of what the government will just save on subsidies for LPG (liquefied petroleum gas) cylinders, it could amount to around Rs1,200 crore. That’s how much is lost on account of duplication or fraud. What could the savings be?

See, it is difficult to put a number on this because it is not really us who is going to implement those savings. So savings depend on implementation.

But if you look across the board - if you look at systems like the PDS (public distribution system), NREGA (Mahatma Gandhi National Rural Employment Guarantee Act), kerosene subsidy, LPG subsidy, fertilizer subsidy and old-age pensions. We have a whole gamut of social welfare programmes and subsidies. I think the savings will be fairly substantial. I can’t put a number around it but it will be substantial.

I think you yourself pointed out that this is only an identification number, a lot will really depend on how the delivery mechanism is actually engineered to deal with this. How do you see things moving?

We have started signing MoUs (memoranda of understanding) with state governments. Recently we signed our first MoU with the state of Madhya Pradesh and that MoU is on our website.

So that tells exactly what is the relationship between us and the state. We are signing with other states.

Now, we are also in discussions with the Ministry of Rural Development to make sure the NREGA tie-up happens. We have had discussions with the food and civil supplies department on the PDS. But ultimately a lot of this is also at the state level because the state runs the PDS, the state runs NREGA, state runs RSBY (Rashtriya Swasthya Bima Yojana), the state runs old-age pension.

The finance minister (FM) in his Budget speech said we would see the first numbers being rolled out any time between August of this year and February next year. Do you now have a more specific timeline?

That’s our commitment. Just to retrace a bit, the Budget speech of FM last year in July 2009 had very clearly said that the first UIDs would roll out in 12-18 months. For us that clock started ticking on August 12. So 12-18 months from August 12, 2009 to August 2010 to February 2011...So we are absolutely sure and we are very comfortable that we will issue the first set of UIDs before February 2011.

What about the revenue generation model as far as the UID is concerned?

We talked about this and the argument is that for basic authentication it should be free. But if people start using UID for address verification - suppose you go to a bank to open account and you give an address, the bank wants to verify that the address you have given to them is the same as on the UID master file.

Then they can make a request to us and if we want ...they can pay...also today the KYC (know your customer) process for opening an account or getting a mobile phone costs them anywhere from Rs 50-200.

But more than the revenue thing it is putting accountability on us to have high-quality data and that’s really more to create the feedback loop that the data is good quality.

Even though revenue generation is not the purpose really behind this project, what would the revenue be? I understand it is going to be about Rs 300 crore annually.

That is a guesstimate. In our draft approach we have put an estimate of Rs 288 crore.

What has really transpired in your conversations especially with the global information technology firms? How are they looking at this project at this point in time?

This is one of the biggest projects happening in the world anywhere. The scale - one billion people and the biometrics. So I think there is a lot of excitement about that and I do get a lot of visitors from both India and abroad.

We have a very open policy. We share our road map with everyone.

I went to Nasscom (National Association of Software and Service Companies) in February and laid out our plans...We are having a big vendor conference in April where we are going to invite all potential suppliers of our ecosystem and we are laying out the road map as to what biometrics and enrollment we are going to do, and what is the revenue side approximate.

So this is a very transparent methodology where everyone knows what’s happening and everyone is welcome to participate. We are saying these are the tenders that are going to come out and RFPs, you guys bid and let the best company win.

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